Google faces UK trial over £13.6bn adtech market abuse

google_broken2The UK’s Competition Appeal Tribunal has given the green light to a group of online publishers to pursue their £13.6bn claim against Google over its alleged abuse of power in the digital advertising market, meaning it can now proceed to trial.

The British claim, which is being supported by similar action in the Netherlands, is seeking compensation for lost revenue from the sale of advertising space on the websites of news publishers and any site funded by online ads, nearly 200,000 businesses.

The claim is being brought by Ad Tech Collective Action (ATCA), led by Claudio Pollack, Charles Arthur and Kate Wellington, who allege that Google abused its dominant position in the adtech market and caused significant loss to UK online publishers.

ACTA argues that Google’s alleged anti-competitive behaviour has harmed publishers by “dictating terms, controlling pricing” and “favouring its own platforms” in the process of selecting ads displayed online. These practices, the lawsuit claims, have reduced publisher advertising revenue by up to 40%.

In May, ATCA sought the Competition Appeal Tribunal’s approval to represent publishers on an opt-out basis. Google submitted that the case should not be certified because it was insufficiently pleaded and lacked an appropriate methodology for the assessment of harm caused to publishers.

However, in this week’s judgment, the tribunal, presided over by Sir Marcus Smith,  dismissed Google’s arguments in full, ruling that the group had properly pleaded its case and had put forward a sound methodology to assess the value of the claims, and therefore authorised ATCA to act as the class representative and permitted the claim to proceed to trial.

ATCA will represent all UK-domiciled natural or legal persons that publish content on websites or mobile apps containing ad units in respect of which they received revenue from January 1 2014 to November 30 2022, unless they choose to opt out. A smaller “opt-in” class of publisher partners (resellers) will also be represented.

Google’s conduct in the ad tech market is under scrutiny in numerous jurisdictions. In June 2021, the French competition authority concluded that Google had abused its dominant position in this market. Google did not contest the decision, accepted a fine of €220m and agreed to change its conduct.

The UK Competition & Markets Authority, the European Commission and the US Department of Justice have also commenced investigations into or legal proceedings regarding Google’s conduct in adtech.

The tribunal’s decision allows ATCA’s proceedings on behalf of UK online publishers to proceed in parallel with these major trials and investigations. ATCA insists this means that UK victims of Google’s conduct continue to have real prospects of being compensated in a timely fashion for the harm they have suffered.

ATCA partner Claudio Pollack said: “This is a decision of major importance to the victims of Google’s anti-competitive conduct in adtech. Google will now have to answer for its practices in a full trial.

“I look forward to working with our legal and economic advisers to deliver compensation for years during which the relevant markets did not provide a competitive outcome for the UK publishing market.”

ATCA has secured third-party litigation funding to bring the proposed claim and insurance in respect of Google’s costs of defending the claim, which means affected UK publishers will not pay costs to participate in this legal action nor will they have any financial risk in relation to Google’s costs.

Luke Streatfeild of Hausfeld & Co. LLP, Toby Starr of Humphries Kerstetter LLP and Damien Geradin of Geradin Partners, who are leading the litigation on behalf of ATCA, stated jointly: “Despite Google’s attempts to derail this necessary and timely action, the tribunal has seen that the case is well-argued and provides a clear blueprint to trial.

“Google’s practices continue to cause significant damage to the UK media landscape. This unanimous certification judgment is a first step in delivering proper compensation to Google’s victims.”

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